The Immorality of a $15 Minimum

Robert Reich, a sometime contributor to this magazine and one of the smartest thinkers on the economic left, has an interesting piece on his blog entitled “The Morality of a $15 Minimum Wage.” While most defenses of a national $15 minimum wage assert that such a radical policy change would have essentially no downsides—that the federal government could suspend the laws of economics and double the cost of labor without reducing employment—Reich makes the concession that the policy would likely destroy jobs, but argues that it should be implemented anyway. “Maybe some jobs are worth risking if a strong moral case can be made for a $15 minimum”, Reich writes. He continues:

People who work full time are fulfilling their most basic social responsibility. As such, they should earn enough to live on.

A full-time worker with two kids needs at least $30,135 this year to be safely out of poverty. That’s $15 an hour for a forty-hour workweek.Any amount below this usually requires government make up the shortfall — using tax payments from the rest of us to finance food stamps, Medicaid, housing assistance, and other kinds of help.What about the risk of job loss? Historically, such a risk hasn’t deterred us from setting minimum work standards based on public morality.The original child labor laws that went into effect in many states at turn of last century were opposed by business groups that argued such standards would raise the costs of business and force employers to lay off large numbers of young workers.

By admitting that a $15 minimum would likely cause American workers to lose their jobs, Reich shows far better economic judgment than his fellow minimum wage boosters, who generally substitute ideological bluster for economic reasoning when faced with this dilemma. But he’s wrong on the morality. Even if one agrees with Reich—as we do—that society owes a basic standard of living to all citizens who work full time, there is no reason such support must take the form of a minimum wage hike that would sever other workers’ connection to the job market. In fact, there is a strong moral case against such a policy.

It’s true that a $15 minimum would make it possible for some arbitrary number of workers to be “safely out of poverty” without relying at all on social programs. But it would only achieve this by shutting other vulnerable people out of the labor force, forcing them to rely entirely on social programs. It’s unclear how it serves the interests of public morality to have some people (the people whose jobs are lost as a result of the minimum wage hike) permanently and entirely supported by welfare programs so that others (the few beneficiaries of the hike) can shed their partial dependence on such programs.In our view, the right to work—to enjoy the fruits of one’s own labor—is a core part of human dignity. A “moral” public policy would be aimed at ensuring that as many people as possible are able to find jobs. Even if those jobs pay poorly, they provide skills and experience that allow people to command higher wages in the future. And of course, there is room for programs like the Earned Income Tax Credit to enhance the income of low-wage workers and ensure that working people have some level of material security.Reich has a different vision: that government should mandate that all employers offer higher wages, and that people who can’t find jobs at those wages should be denied the chance to work. But creating a permanent underclass of people who can never get the skills for a meaningful career is not moral; it is cruel.In other words, public morality does not and has never required us artificially to exclude millions of low-skilled adults from the job market for the benefit of (some) of their higher-skilled counterparts. Nor does it require us to destroy small-town local economies and hobble America’s fragile manufacturing sector with a big minimum wage hike when we have good reasons to think that there are more effective poverty-alleviation strategies available.Reich’s piece is welcome because it avoids the economic sleight-of-hand typically associated with left-wing minimum wage arguments and gets to the heart of the issue: Do we want to shut some people out of the workforce so that we can lift other peoples’ paychecks? And he’s right that, at some level, economic debates are moral ones. A just society must find ways to reduce poverty and expand opportunity for its vulnerable citizens. But a one-size-fits-all $15 hike is emphatically not the answer.